This chart represents a bearish setup for the U.S. Dollar Index (DXY) on the 4-hour time frame. Various technical tools and indicators have been applied to support the sell breakdown strategy. Below is a breakdown of the analysis:
1. Key Resistance Zone (Red Box & Blue Line at 104.680)
A strong resistance zone has been identified around 104.680 (blue horizontal line).
This level aligns with the 23.6% Fibonacci retracement of the previous downtrend, making it a significant area where sellers may step in.
The price has failed multiple times to break above this zone, confirming bearish pressure.
2. Bearish Rejection & Trendline Structure (Yellow Trendlines)
The yellow descending trendline indicates a downward trend.
Price formed a rising wedge pattern, which is a bearish reversal structure.
A breakdown from this wedge signals potential further downside movement.
3. Sell Breakdown Confirmation (Gray Label & Arrows)
A sell breakdown label is placed where the price starts breaking the wedge pattern.
Blue arrows suggest a possible price movement towards lower support levels.
4. Key Support Targets (Blue Horizontal Lines at 103.199 & 103.242)
The first target is around 103.199, marked as a major support level.
If price breaks below 103.199, a further decline towards 102.000 - 102.200 is expected.
5. MACD Confirmation (Bottom Indicator)
The MACD (12,26) Histogram shows decreasing bullish momentum, signaling a possible bearish reversal.
Conclusion
Bearish setup is confirmed by:
Resistance rejection at 104.680
Breakdown of the rising wedge pattern
Bearish MACD signal
Targeting support at 103.199 and lower
Trading Strategy:
Sell below 104.138 (current level)
Target: 103.199 - 102.200
Stop-loss above 104.680 (resistance zone)
This setup suggests a high-probability short trade if price sustains below the breakdown level.
1. Key Resistance Zone (Red Box & Blue Line at 104.680)
A strong resistance zone has been identified around 104.680 (blue horizontal line).
This level aligns with the 23.6% Fibonacci retracement of the previous downtrend, making it a significant area where sellers may step in.
The price has failed multiple times to break above this zone, confirming bearish pressure.
2. Bearish Rejection & Trendline Structure (Yellow Trendlines)
The yellow descending trendline indicates a downward trend.
Price formed a rising wedge pattern, which is a bearish reversal structure.
A breakdown from this wedge signals potential further downside movement.
3. Sell Breakdown Confirmation (Gray Label & Arrows)
A sell breakdown label is placed where the price starts breaking the wedge pattern.
Blue arrows suggest a possible price movement towards lower support levels.
4. Key Support Targets (Blue Horizontal Lines at 103.199 & 103.242)
The first target is around 103.199, marked as a major support level.
If price breaks below 103.199, a further decline towards 102.000 - 102.200 is expected.
5. MACD Confirmation (Bottom Indicator)
The MACD (12,26) Histogram shows decreasing bullish momentum, signaling a possible bearish reversal.
Conclusion
Bearish setup is confirmed by:
Resistance rejection at 104.680
Breakdown of the rising wedge pattern
Bearish MACD signal
Targeting support at 103.199 and lower
Trading Strategy:
Sell below 104.138 (current level)
Target: 103.199 - 102.200
Stop-loss above 104.680 (resistance zone)
This setup suggests a high-probability short trade if price sustains below the breakdown level.
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For Training visit.
Website wave-trader.com
Website techtradingacademy.com
Slack: wavetraders.slack.com
Telegram: t.me/Wavetraders
X: twitter.com/Wave__Trader
FB: facebook.com/WTimran
Website wave-trader.com
Website techtradingacademy.com
Slack: wavetraders.slack.com
Telegram: t.me/Wavetraders
X: twitter.com/Wave__Trader
FB: facebook.com/WTimran
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.